The Board of Directors initiated a formal review of strategic alternatives for the Ammunition segment during the year ended March 31, 2025. This review of strategic alternatives resulted in the decision to sell the Ammunition segment. Accordingly, we determined the assets of the Ammunition segment met the criteria for classification as held for sale. Additionally, we determined the ultimate disposal will represent a strategic shift that will have a major effect on our operations and financial results. As such, the results of the Ammunition segment are presented as discontinued operations in the accompanying consolidated statements of operations and consolidated statement of cash flows for all periods presented. The assets and liabilities of the Ammunition segment have been reflected as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets for the fiscal year ended March 31, 2025. Net proceeds were approximately $42.9 million.

Refer to Note 2 under the caption “Assets Held for Sale and Discontinued Operations” for additional details on accounting criteria for held for sale and discontinued operations treatment.

Loss from discontinued operations, net of tax in the consolidated statements of operations reflects the after-tax results of the Ammunition segment and does not include any allocation of general corporate overhead expense or interest expense. The following table summarizes the results of operations of the Ammunition segment that are being reported as discontinued operations:


	For the Year Ended March 31,
	2026(1)			2025

Net revenues(2)	$	752,762		$	74,867,419
Cost of revenues		1,599,202			83,079,531
Gross profit		(846,440	)		(8,212,112	)

Operating expenses
Selling and marketing		15,819			1,296,141
Corporate general and administrative		232,104			8,553,708
Employee salaries and related expenses		84,502			2,610,046
Depreciation and amortization expense		-			35,866
Total operating expenses		332,425			12,495,761
Loss from operations		(1,178,865	)		(20,707,873	)
Total other income/(expense)		583,231			(617,756	)
Impairment of assets		-			(45,847,430	)
Loss from discontinued operations before income taxes		(595,634	)		(67,173,059	)
Benefit for income taxes		(2,003,585	)		(1,560,922	)
Income (loss) from discontinued operations, net of tax	$	1,407,951		$	(65,612,137	)

(1) Reflects results from April 1, 2025 through April 18, 2025 only, except for the benefit for income taxes.

(2) Included in revenue for the years ended March 31, 2026 and 2025 are excise taxes of $27,185 and $5.0 million, respectively.

There were no assets or liabilities classified as discontinued operations as of March 31, 2026. The following table summarizes the Ammunition segment assets and liabilities classified as discontinued operations in the accompanying consolidated balance sheet:


	March 31, 2025
ASSETS
Accounts receivable, net	$	8,778,545
Inventories		21,520,796
Prepaid expenses		198,379
Equipment, net		25,983,100
Patents, net		1,409,542
Total assets held for sale	$	57,890,362

LIABILITIES
Accounts payable	$	2,513,533
Accrued liabilities		3,280,449
Current portion of construction note payable		286,200
Construction note payable, net of unamortized issuance costs		10,564,816
Total liabilities held for sale	$	16,644,998

Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of March 31, 2025, we determined that the fair value of the Ammunition segment, including costs to sell was lower than its carrying value and we recorded a $45.8 million impairment. The fair value of the Ammunition segment was estimated using the expected sale price as negotiated with the Buyer.

Capital expenditures related to discontinued operations were $40,000 and $2.1 million for the years ended March 31, 2026 and 2025, respectively.

During the year ended March 31, 2025, we determined that our Ammunition segment should be classified as held for sale. In connection with the reclassification of the segment's assets and liabilities, we recorded an impairment of $45.8 million. For the impairment charges, we performed an undiscounted cash flow analysis on the asset group and determined that net carrying values exceeded the estimated undiscounted future cash flow. We estimated the fair value of the asset group based on a discounted cash flow method and recorded an impairment for asset groups where the fair value was lower than its carrying value. The significant estimates

used in the discounted cash flow methodology, which are based on level 3 inputs, include our expectations for projected cash flow to be generated from the asset group. The total impairment included a write-down of inventory of $16.9 million based on an analysis of liquidation values and obsolescence.